Louisiana oil industry representatives and others blasted a multi-million-dollar coastal-erosion settlement authorized Thursday by Attorney General Jeff Landry as misguided and flawed, arguing that it fails to address the underlying issue of coastal restoration
At a press conference Thursday, Landry cautioned against fragmented litigation that can harm the oil and gas industry and ignore the federal government’s role in advancing shoreline damage. But he said the memorandum of understanding the state has entered with Freeport-McMoRan Inc. will be in Louisiana’s long-term interest.
“Today’s resolution meets the criteria I have deemed necessary: good for Louisiana, productive for the coast and consistent with the Coastal Master Plan; contains regulatory or credited relief for the industry; and must be final and create certainty for industry moving forward,” he said in a statement.
The settlement will allow Freeport to deposit $50 million into an escrow account, with subsequent annual payments of $4.25 million coming over the next two decades – provided that state legislators pass the needed supporting legislation, the attorney general said. In return, litigation between coastal parishes and the company would come to an end.
The Attorney General’s Office had a duty to hear out the company’s claim, Landry said, adding that he is not pressuring any of the other parties in the litigation to settle.
“When parties come to the state asking us to resolve those matters, it’s our duty to do so,” he said.
But Melissa Landry, spokeswoman for legal teams representing BP America Production Co., Chevron, ConocoPhillips, Exxon Mobil Corp. and Shell, called the settlement misguided, arguing that the oil companies operated legally with the cooperation and encouragement of state and federal officials for decades.
“This distortion of state policy was created by private plaintiffs’ lawyers who are not accountable to the public and serve their own interests,” Landry said in a statement. “We hope this circumvention of the law will not be allowed to continue and that all interested parties can work together to support our coast and our communities.”
The oil companies are battling lawsuits brought by coastal parishes that seek billions of dollars in damages for coastal erosion that resulted from energy development.
The president of the Louisiana Mid-Continent Oil and Gas Association, Tyler Gray, and Mike Moncla, who heads the Louisiana Oil and Gas Association, released a joint statement that challenges whether the settlement would benefit the coastal environment.
“It is disappointing that some elected officials have sided with plaintiffs’ attorneys in support of job-killing lawsuits and a flawed settlement scheme that could put our coast further at risk,” the statement says. “... This proposed settlement is not dedicated to coastal restoration – the supposed reason why these lawsuits were filed. Under this problematic proposal, funds could be used for projects unrelated to coastal restoration and hurricane protection.”
The Pelican Institute for Public Policy, which published a study concluding that the lawsuits have hurt Louisiana’s economy to the tune of $44 million to $113 million annually since the lawsuits were filed, was similarly unimpressed by Thursday’s announcement.
“Our state government shouldn’t be in the business of suing job creators, particularly considering the fact that these lawsuits kill jobs without guaranteeing funding will go toward coastal restoration efforts,” the institute’s CEO, Daniel Erspamer, said in a statement emailed to the Louisiana Record.
Louisiana Lawsuit Abuse Watch (LLAW), an organization favoring tort reforms, noted that more than 40 such coastal lawsuits have been filed against hundreds of energy firms that continue to operate in the state.
“This proposed agreement with one company no longer operating here does not begin to substantively address the larger issue of coastal restoration, the stated objective in these lawsuits,” LLAW said in a statement emailed to the Record.
LLAW also raised concerns that the agreement may jeopardize federal funding for shoreline restoration.
“We believe this proposed settlement agreement drafted by private plaintiffs’ attorneys, at the expense of Louisiana’s comprehensive coastal restoration efforts, is not in the best interest of Louisiana’s taxpayers and is a threat to our working coast,” the statement said.